G.R. No. 145855 - Pepsi-Cola Products Philippines Inc. vs. Court of Appeals

Pepsi-Cola Products Philippines, Inc. Employees and Workers Union (PCEWU) is the duly-registered labor union representing employees of Pepsi-Cola Distributors of the Philippines (PCDP).
The dispute involves claims for overtime pay for fifty-three workers employed in various capacities such as salesmen, warehousemen, truck helpers, route salesmen, distributors, conductors, and forklift operators.
The overtime pay claim arose from services rendered on designated Muslim holidays in calendar year 1985.
PCEWU filed the complaint with the Regional Arbitration Branch No. X of the Department of Labor and Employment (DOLE) in Cagayan de Oro City, docketed as NLRC RABX Case No. RO-7-0234-86.

PCEWU alleged that in previous years overtime pay had been accorded on eight Muslim holidays, a practice which they sought to continue.
The complaint was supported by documentary evidence including:

A photocopy of relevant provisions of Presidential Decree (P.D.) No. 1083;
A certification from the Regional Autonomous Government of Region 12-A attesting to the observance of eight Muslim holidays in 1985;
Individual computations of the overtime claims for each worker.

Only five Muslim holidays were legally recognized under the applicable law;
The cities of Cagayan de Oro and Dipolog did not officially observe these holidays;
The overtime benefit was intended solely for rank-and-file employees and not for managerial staff.

The Executive Labor Arbiter (ELA) issued a decision on May 26, 1987, favoring PCEWU and ordering overtime payments for specific designated dates in 1985.
The ELA’s ruling included detailed computations for each affected worker and extended the benefits to those assigned in both Region 12 and Region 9, with a distinction based on the applicable holidays.
The National Labor Relations Commission (NLRC) affirmed the ELA decision with modifications on March 21, 1991, addressing concerns such as:

Subsequent motions for partial reconsideration were filed by both the respondent (PCDP) and the employee union.
During the pendency of these motions, ownership changes occurred when various Pepsi-Cola bottling plants were transferred to Pepsi-Cola Products Philippines, Inc. (PCPPI).
On February 11, 1992, the NLRC dismissed the complaint on the ground that PCDP had ceased to exist as a corporate entity due to its dissolution, thereby rendering any judgment unenforceable.

PCEWU challenged the NLRC’s dismissal by filing a motion for reconsideration of the February 11, 1992, Resolution.
The NLRC subsequently denied this motion on June 4, 1992, maintaining that the dissolution of PCDP precluded further jurisdiction over it.
The petitioner (PCPPI), as the successor-in-interest to the dissolved PCDP, filed a petition for the nullification of the NLRC’s Resolution.
On November 23, 1998, the Court referred the case to the Court of Appeals (CA) for proper disposition of the corporate dissolution issue and related jurisdictional matters.

A contentious point was whether the observance of eight Muslim holidays (versus the five strictly enumerated under P.D. No. 1083) was legally sustainable, particularly in light of regional legislative actions.
Another issue involved whether non-Muslims and managerial employees should be entitled to overtime benefits in areas designated as Muslim regions.

Whether Pepsi-Cola Products Philippines, Inc., as successor-in-interest to the dissolved PCDP, is liable for the unpaid overtime obligations toward its employees.
Whether a dissolved corporation, given the three-year extension period under Section 122 of the Corporation Code, remains liable for its pre-dissolution obligations.
Whether the NLRC committed grave abuse of discretion in dismissing the complaint solely on the basis of the dissolution of PCDP.
Whether non-Muslims working in regions where Muslim holidays are observed are entitled to overtime pay benefits under P.D. No. 1083.
Whether the correct number of observable Muslim holidays in the areas in question is five or eight, taking into account regional legislative enactments.
Whether managerial employees, who are paid on a monthly basis and provided with day-off privileges, are entitled to overtime pay.
Whether the decision of the Court of Appeals, which reinstated the Executive Labor Arbiter’s (ELA) ruling without a detailed exposition of the underlying facts and law, violates the constitutional requirement under Section 14, Article VIII.